Date of Graduation

5-2021

Document Type

Thesis

Degree Name

Master of Science in Agricultural Economics (MS)

Degree Level

Graduate

Department

Agricultural Economics and Agribusiness

Advisor

Michael R. Thomsen

Committee Member

Bruce L. Ahrendsen

Second Committee Member

Lawton Lanier Nalley

Keywords

AC Nielsen Answers, Dry Wines, Purchase Behavior, Small Wineries, US Wine Market, Wine Economics

Abstract

The objective of this study is to explore wine purchase behavior in the United States market, including different off-premise channels using AC Nielsen panel data and wine prices and rankings from the Wine Enthusiast database of wine reviews. The purpose of this thesis is to identify factors that impact customer loyalty to retail wine brands. In so doing my goal is to provide information that can be used to improve marketing efforts of small wineries that are seeking to grow into mainstream retail formats. The results suggest that efforts to build brand equity will be more successful if the brand can be placed within multiple retailers and channels. This suggests two things. First, efforts to expand the retail market should, to the extent possible, emphasize an expansion strategy with an aim towards broad exposure across retailers and formats in a specified geographic area. Second, in terms of building brand loyalty, a strong commitment to expansion would be more successful than an incremental “slow growth” type of an approach. Consequently, the volume needed to support expansion will require a significant augmentation to the production capacity of the winery. Regarding product mix wineries should emphasize growth through product lines that can make use of grapes that are suited for local production. The results of this thesis indicate that price, while being statistically related to each of the four measures of customer loyalty, is probably not the overriding concern when it comes to developing and maintaining customer loyalty. Efforts to optimize pricing might instead be aimed at product-push-type incentives to facilitate placement of the brand with retailers and thereby increase brand penetration within the market area. It would be a good strategy to use point-of-sale promotions to inform consumers about the winery, its story, values and to provide incentives to participate in winery visits or local wine tours.

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